Can SpotScout Take the Pain out of Parking?

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Finding parking in a busy urban area like Boston can feel like a high-stakes game of musical chairs—except that when the music ends and every parking spot is filled, there are still tens of thousands of people driving in circles.

SpotScout, a service slated to launch this month in Boston and one to two months after that in San Francisco and New York City, is designed to give users an advantage in the cut-throat competition for parking spots. In the process, SpotScout founder and CEO Andrew Rollert wants to help save the environment—and generally make it less of a hassle to own a car in the city. “I see the value of a car as being directly tied to the availability of parking spots,” Rollert told me last week. “If a car doesn’t have a parking spot in the area it’s going to, that devalues the car.”

Like so many dot-com-era and Web 2.0 businesses before it, SpotScout uses the Internet and mobile communications to make an existing marketplace more transparent and efficient. EBay did it, for example, with the marketplace for the junk in your closet that might actually be somebody else’s treasures. SpotScout is doing it for the marketplace of information about open parking spaces—many of which go unfilled simply because people don’t know they’re there.

Here’s how it works. People who own parking spots—whether they’re commercial garage operators or just private citizens with driveways or other spots that are empty during certain hours—can upload that information to SpotScout. (They’re called “SpotCasters,” in SpotScout’s parlance.) Then, using their desktop computers, laptops, or Internet-enabled cell phones, people seeking spots— or “SpotScouts”—can tell the service where they need a parking spot and when; see a list of available choices, organized by cost, user rating, walking distance to the final destination, or other criteria; reserve a spot, effectively taking it off the market; pay for the spot electronically, from their SpotScout account; and receive a text-message confirmation, sometimes accompanied by discount offers at businesses near the parking spot.

The spot-finding service (not counting the cost of parking) is free to SpotScouts, but SpotCasters pay the company a small percentage of each transaction. Rollert also hopes to earn revenue from the location- and time-based discounts offered to parkers. “A lot of people have tried location-based marketing and it hasn’t worked out,” he says. “But the key ingredient for us is that we’ve found you a parking spot and you’ve paid money to say, ‘I need you to take that spot off the market’—and that means you’re going to show up at a specific time. With other location-based direct marketing systems, they don’t really know if or when you’re going to be there. But because our users have told us what time they’re arriving, we can say that, for example, ‘Between your parking spot and your destination there are 32 businesses, and here are a few who would give you a discount if you came in just after 2:00 p.m. or right before 4:00 p.m.”

People who have heard about SpotScout’s ambitious plan, which has been under development for more than two years, generally seem to welcome it, or any other idea that might make parking easier. Rollert was recently interviewed by NBC’s Today Show, and the company has been getting pre-launch publicity for months from the likes of The Boston Globe, The New York Times, USA Today, CNN, MSNBC, CNET, and NPR. Rollert’s presentation at the most recent Web Innovators Group gathering in Cambridge on January 29 won the audience-favorite vote in a text-messaging-based instant poll.

All this buzz may help attract some much-needed venture capital for SpotScout, which has been self-funded up to now. But raising capital is only one of the hurdles the startup faces on its way to generating a significant volume of parking transactions. Another is the classic chicken-and-egg problem. Drivers may not use the service unless … Next Page »

Another recent addition to the online parking landscape has hit the scene. http://www.parkingspots.com is designed to connect those needing parking and those that have it. Leveraging non traditional parking spots (driveways, condo buildings etc.) as well as more traditional lots, parkingspots.com has been building rapidly across North America since its launch in February. WHile it is not yet mobile, it serves to help connect monthly parkers across Canada and the US. An interesting complemenet to Spotscout, it’s something to keep your eye on…